Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 22. lux hotels, inc. has signed a contract wi

22. Lux Hotels, Inc. has signed a contract with Deluxe...

90.2K

Verified Solution

Question

Accounting

22.
image
Lux Hotels, Inc. has signed a contract with Deluxe Rooms, Inc. for $3 million. In the contract Lux sold cleaning equipments to Deluxe and also receive one year's cleaning service from Deluxe. Deluxe received the $3 million cash at contract inception. The standalone price for the equipment is $200,000 and the stand alone price for the service contract is $3 million. Under the cleaning service agreement, Deluxe Rooms is obligated to clean and prepare hotels rooms managed by Lux Hotel on a daily basis from August 1, 2018 to July 31, 2019. What is the deferred revenue recognized for the sale of service contract at the inception of the contract? Please write out your numbers. Do not use words such as million or thousands in your

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students